Amazing and Shocking
Fact About Stock Market
1. Is this is good market to buy or
sell.
2. Penultimate preparedness.
3. The cocktail theory.
4. What stock market?
5. Pointers that remember.
Is this is good market to buy or sell.
During every question-and-answer period, somebody
stands up and ask me if were in a good market or bad market. Obviously you don’t
have to able to predict the stock market to make money in stocks, or else I
wouldn’t have made any money. No one can predict market, only we do is to
invest in good companies at fair price and hold it for long time.
There is another theory that we have recessions every
five years, but it hasn’t happened that way so far.
Penultimate Preparedness
No matter how we arrive at the latest financial conclusion,
we always seem to be preparing ourselves for the last thing that’s happened, as
opposed to what’s going to happen next. This “penultimate preparedness” is our
way of making up for the fact that we didn’t see the last thing coming along in
the first place.
The great joke is that the next time is never like the
last time, and yet we can’t help readying ourselves for it anyway. This all reminds
me of the Mayan conception of the universe.
Someday there will be another recession, which will be
very bad for the stock market, as opposed to the inflation that is also very
bad for the stock market. Maybe there will already have been a recession between
now and the time this is published. Maybe we won’t get one until 1990, or 1994.
The Cocktail Theory
If professional economists can’t predict economies and
professional forecasters can’t predict market, then what chances does the amateur
investor have? You know the answer already, which brings me to my own “cocktail
party” theory of market forecasting, developed over years of standing in middle
of living rooms, near pinch bowls, listening to what the nearest ten people
said about stocks.
I don’t believe in predicting markets. I believe in
buying great companies- especially companies that undervalued, and or underappreciated.
Whether the Dow Jones industrial average was 1,000 or 2,000 or 3,000 points
today, you’d be better off having owned Marriott, Merck and McDonald’s than
having owned Avon Products, Bethlehem steel and Xerox over the last ten years.
What Stock Market?
The market ought to be irrelevant. If I could convince
you of this one thing, I’d feel this series had done its job. And if you don’t
believe me believe Warren Buffett. Buffett has written, “The stock market doesn’t
exist. It is there only as a reference to see if anybody is offering to do
anything foolish.”
Pick the right stocks and the market will take care of
itself. Buffett return his partner’s money was that he said he couldn’t find
any stock worth owning. He’d looked over hundreds of individual companies and
found not one he’d buy on fundamental merits.
Pointers that remember
·
Don’t overestimate the skill and wisdom
of professionals.
·
Take advantage of what you already
know.
·
Look for opportunities that haven’t
yet been discovered and certified by Wall Street- companies that are “off the
radar scope.”
·
Invest in a house before you invest
in a stock.
·
Invest in companies, not in the stock
market.
·
Ignore short-term fluctuation.
·
Large profits can be made in common
stocks.
·
Large losses can be made in common
stocks.
·
Predicting the economy is futile.
·
Predicting the short term direction
of stock market is futile.
·
The long term returns from stocks are
both relatively predictable and also far superior to long term return from
bonds.
·
Keeping up with a company in which
you own stock is like playing an endless stud poker hand.
·
The average person is exposed to interesting
local companies and products years before the professionals.
·
Common stocks are not for everyone,
nor even for all phases of person life.
·
Having an edge will help you make
money in stocks.
·
In stock market, one in hand is worth
ten in bush.
Congratulation you take
one more step towards your financial freedom.
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Thank you
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